It comes from a shifting group of lawmakers in the Senate Finance Committee, and if a bipartisan compromise is to clear Congress this year, it’s main lines are likely to emerge here, as it did with President Bush’s first domestic victory: the 2001 tax cuts.

For now, she says, the groups is not considering peeling off policies for which there is broad consensus, such as a patient’s bill of rights or a measure banning insurance companies from making pricing decisions based on “preexisting conditions.”

“We’re really trying to grapple with reform of the entire system, if at all possible,” she adds.

“Answering these questions of substance is how we get to a result,” said Senator Baucus Tuesday. He did not confirm press reports that the bipartisan group is between $100 billion and $200 billion short of being able to pay for the $1 trillion-plus bill.

Meanwhile, House lawmakers are watching the progress of these negotiations carefully, as they could influence the timing of a House vote.

Some 50 members of the so-called Blue Dog caucus – Democrats who are considered fiscal conservatives – are in tense negotiations with their leadership over healthcare reform. Many are reluctant to support the House bill, which includes higher taxes for the rich, unless they are sure that the same provisions will be in the Senate bill.

Fiscally conservative Democrats in the House are urging leaders to rein in costs. They are urging the House first to identify savings in the current healthcare system, then use those savings to fund an expanded program of public insurance. They also want to limit new entitlements to what can be funded without adding to the federal deficit.

“We should see what we can achieve through savings in the system and do with that,” says Rep. Jason Altmire (D) of Pennnsylvania.

In a briefing after a party caucus luncheon, Senate majority leader Harry Reid said that he was encouraged by the progress of the bipartisan group.

“We’re closer than ever to getting it done,” he said. "I’m very hopeful they’ll have a bill this week, and we can start marking it up next week."